Ahlstrom Oyj faces an in-depth European Union probe into plans to merge one of its units into Munksjoe AB, regulators said today.
The European Commission set an April 29, 2013 deadline to rule on the deal, saying it was concerned over the combined firm’s high market share for so-called pre-impregnated paper used to apply a decorative veneer to furniture and abrasive paper backings, such as sandpaper, according to an e-mailed statement.
“This proposed merger in the paper industry would remove a competitor from some markets which are already highly concentrated,” EU Competition Commissioner Joaquin Almunia said in the statement.
Ahlstrom will hold a 15 percent-stake in the new company, to be called Munksjoe Oyj, the companies said in August. They anticipated annual synergies of as much as 30 million euros ($39 million.) While EU regulators have the power to block deals, they can approve transactions after companies allay antitrust concerns by agreeing to sell off assets or changing the way they do business.
Ahlstrom and Munksjoe said the EU investigation may delay completion of the first phase of the planned transaction until the second quarter of 2012.
The companies “continue to work closely with the commission, aiming at a completion of the demerger of Ahlstrom’s label and processing business in Europe and other related measures forming the first phase of the planned transaction during the first quarter of 2013,” they said in an e-mailed statement.